India the Chinese Charge

5 August 2021


India’s lifting industry is changing from its accident-ridden past. Stuart Anderson, president of Chorley Barr Associates, sees China leading growth, the used-crane market on the wane, and welcomes the decline of the tractor crane.

In the years 2007-2008 Delhi prepared to host the 2010 Commonwealth Games. In particular it worked to extend and improve its transport infrastructure., both metro and road. A string of construction accidents followed. In the worst, on July 13th 2009, no fewer than four mobile cranes, themselves attempting to clear a construction fail, collapsed at once. In another a tractor crane – a peculiarly Indian institution - fell from an overpass under construction. Several of the accidents were fatal.

There is, though, some good news. Certainly, to some extent, the string of high-visibility accidents of the period marked something of a turning point in terms of crane safety in India. While the vast majority of the tens of thousands of small tractor cranes in service have little or no effective safe load indicators, the same also applies to the thousands of old, larger-size used truck, all terrain and rough terrain cranes mostly imported second-hand from around the world. During the 1990s and early 2000s there was a strong trade in used 25-50-tonne Japanese truck cranes purchased from Australia and SE Asia.

Demand progressively advanced for larger truck and all terrain cranes imports of 80-to-200- tonnes capacity, with supply transitioning to Germany and the US. For these larger-sized telescopic cranes India has long-favoured Grove, Krupp and Demag truck and all terrain cranes, typically of 8-15-years age. These brands are favoured because Indian engineers are more comfortable and adept in repairing cranes with minimal electronics. However, as the supply of cranes built before c.2010 dwindles, used Liebherr ATs have grown in popularity.

Ultimately at least one good thing seems to have resulted from India’s plague of crane accidents. Contractors, developers and machine owners are now required to document the age of the cranes being used on a job site. This seems to be acting as a major deterrent to using old cranes on major contracts. While the extremely cost-driven Indian market continues to cut corners and often buys used cranes rather than new ones, things are changing. Thanks to the long-term efforts of local manufacturers of high status like TIL (Grove), and thanks also to more recent arrivals to the manufacturing sector such as Sany, Zoomlion and XCMG the penny seems to be dropping – albeit slowly.

In terms of the volume of used cranes being sold since that earlier spate of accidents, demand for used truck and all terrain cranes has significantly reduced. At the same time several large fleet owners such as Reliance Industries, Larsen & Toubro and DMRC have ceased buying tractor cranes altogether. This can be no bad thing.

WHAT FUTURE FOR THE TRACTOR CRANE?

The tractor crane is a peculiarly Indian institution. It is what it says it is: a farm tractor with a simple crane mounted on it. Considering that Reliance Industries alone used to have as many as 750 15-tonne tractor cranes on the site of a single large refinery during shut-downs, the decline in their popularity is a big change. It has also had a major influence on the product lines and product development of the two largest makers of pick-and-carry cranes - Escorts (E.C.E.L) and Ace. Over the last ten years their production of small pick-and- carry cranes has switched from around 80:20 in favour of tractor cranes versus articulated-frame pick-and-carry (Franna type) cranes to around 60:40 and is heading towards 50:50. These manufacturers are putting all their efforts into the development of the roadable telescopic mobile with the average size now rising to between 15 and 20-25 tonnes.

Since all the major tractor crane makers are also manufacturers of farm tractors, this is a big factor. While the cost of the articulated-frame 4x4 cranes is significantly higher than tractor-based cranes, they also come with higher-quality componentry and more safety features – all of which recommend more careful handling and higher safety practices.

Still, today there are probably north of 150,000 old tractor crane in service in India. Fundamentally the tractor crane remains the least safe of any type of mobile crane. As versatile as they are, low cost remains their single abiding virtue and few will mourn their eventual passing. Like the motorized rickshaw (put-put), the tractor crane is emblematic of India. India remains the world’s largest farm tractor manufacturer with an annual output now at a record 800,000+. The economies of scale of farm tractor production is a key element in the tractor crane businesses of Escorts and, though less so, for Ace and Indofarms. Other erstwhile tractor crane makers including JCB and Voltas (part of the giant Telco/Tata group) have withdrawn after finding the economics too tough.

Founded in 1944, Escorts remains one of India’s longest-established and best-known companies. It was a pioneer in Indian tractor production, back in 1961, and remains a major force with an annual production of over 80,000. Such volumes have under-pinned the company’s tractor crane production for over 50 years. The business models of Ace with a rapidly declining annual tractor production of around 2,000 (2020) and Indofarms with a relative handful, are much less farm-tractor dependent.

Although Ace only entered the tractor crane business in 1998, it quickly overtook Escorts and now claims a 63% market share. Ace was started by Vijay Agarwal whose family still controls almost 70% of its shareholdings. The company achieved record revenues of INR 1,242.46 Crore ($170.34m) in the year ending 3/31/21 with record EBITDA of INR 79.83 Crore ($5.82m). From the outset Agarwal adopted an aggressive and innovative approach to the management of his company, establishing a range of international alliances that helped broaden his company’s lifting product options.

An engineer, Mr. Agarwal quit Escorts in 1995 and immediately set-up his own crane manufacturing business a few kilometers down the road in the Faridabad hometown of Escorts and JCB. Drawing from his modest personal savings Agarwal built 120 cranes in his first year – almost as many as Escorts’ 150 units. Escorts responded by taking out an injunction against him alleging copyright infringements. The case raged on for two years and ended up in the Delhi High Court before Escorts relented.

Throughout, Mr Agarwal remained confident of his case. ‘If you take the road often travelled, you’ll reach where others are right now. When you take the other, most likely, you feel less tired and reach a better place’, he said.

Escorts had been the first in India to recognize the benefits of the purpose-designed articulated pick-and-carry crane by entering into a licensing deal with Australia’s Franna back in 1996. However the company was slow to fully recognize their broader opportunity; initially they reserved such product types for special applications. Overall, within the large Escorts Group, the crane was a relatively minor product while from the outset for Ace it was their very lifeblood.

As we have said, over the past ten years, due to accidents and a gradual recognition of the weaknesses of the tractor crane the Indian market has transitioned from 80:20 in favour of the tractor crane to nearing 50:50. This trend has been reinforced by the natural development in demand for higher capacity, safer and higher-performance cranes that, needless to say, does not favour a crane based on a farm tractor! Nevertheless, given their proliferation and the relatively low cost of market entry, Indian entrepreneurs have continued to enter the tractor crane manufacturing business: Omega (2004), Standard (2005), Hercules (2007), Indofarms and Priyaa (2011) are recent names.

In India the move to purpose-designed articulated frame mobile pick-and-carry cranes began in 2000 when Escorts licensed technology for small Franna F.15 and Mac 12.14 machines of 12-15-tonne capacity. Escorts needed this ‘new’ type of crane to supply against several large Indian military contracts. While this proved potentially very valuable engineering and manufacturing experience, it appears that the manufacturer did not recognize or seek to exploit their commercial market potential. Of course the price premium carried by this ‘new’ variety of crane was bound to meet resistance in this most cost-conscious of markets and clearly there were legal limits to the degree to which Escorts could exploit Franna technology.

It would be 2006 before Escorts followed up with a larger 16-tonne articulated frame model (the HP 216) and then with the three-model TRX series headed up with the 23-tonne capacity TRX 2319. By this time, the market was waking up to the benefits of this type of mobile crane with Ace introducing the first 12-15-tonne models of its so-called ‘Next Generation’ models. Although somewhat late to the party, as usual Ace quickly committed to an aggressive product development agenda that resulted in a flurry of new articulated models, quickly offering customers a much broader range of models than Escorts.

Changes in domestic construction techniques including increased pre-fabricated concrete buildings and increased size and height of residential construction further hastened demand for higher capacity and larger mobile cranes and especially tower cranes. Ace was this time an early entrant – establishing tower crane alliances with Zoomlion and Alpha Services (Manitou) and quickly becoming a major player.

Even though the 14-15-tonne range pick-and-carry crane remains the market ‘sweet spot’, Ace further pushed the envelope with ever-higher capacity models. Their latest 25 and 30-tonne sister machines feature 5.1m wheelbase, 133hp diesels and GVWs of 20.2/20.3-tonnes. The 30-tonne FX 300 is a short boom heavy lifter while the FX 250 offers 18.3m max height with the manual boom extension deployed.

Because of the design geometry of all cranes of this variety, maximum boom elevation angles are limited to between 60 and 65 degrees, which obviously severely restricts lifting heights. Another constant limitation in the performance of these cranes as well as of their tractor-mounted cousins is the loss of stability during chassis articulation. Manufacturers have taken some steps to mitigate this by installing outrigger jacks at the front and in some case rear of the chassis frame. In addition, the latest Escorts model CT Smart 15 of 14-tonnes capacity features an automatic de-rate triggered upon articulation.

India’s ever-growing traffic congestion is another strong and growing influence against the tractor cranes. As well as being difficult to steer, with vehicle lengths of 10-to-14 metres and very wide turning radii, the tractor crane has proven ever-less suited to busy city work. Clearly in contrast the new 4x2 wheel drive Escorts CT Smart model is very compact with a tight 6m steering radius, encouraging the manufacturer to promote it as something of a city crane.

After a challenging couple of years the pick-and-carry market is on the up. After a challenging 2nd quarter to September 30th 2020 where year-on-year sales slipped 24.4% from 3,056 to 2,309, Q3 2020 (to December 31st) Escorts shipments climbed 20.1% from 1,044 to 1,254. In the quarter ending March 31st 2021, Escorts sold 1,604 cranes compared to 986 in the same period twelve months earlier. By the end of May, their shipments had reached 1,908 compared to 1,093 for the first five months of 2020.

As with the Australian variety of articulated frame pick-and-carry cranes, these new Indian cranes continue to employ the so-called ’slotted’ booms long found on tractor cranes. These ‘slots’ carry sliding hooks for maximum picking capacity at radii reduced versus that offered on their boom-end hookblocks. While useful for heavy and bulky pick-and-carry applications, this design remains a critical weakness of cranes of this type when it comes to ‘normal’ crane work. Such is the trend to articulated frame cranes that it has encouraged even very small crane makers like Punjab-based Standard Corporation to join in with their own new ‘Next Gen’ 20-tonne NGC 20000 model.

As might be expected, little is invested in the comfort or operating efficiency of the Indian crane operators. While tractor crane cabs have always been large and spacious, that is about the full extent of investment in the operator. Indeed one ‘innovative’ approach by Indofarms is to tag a small second cab models on the rear of the crane to accommodate the drivers assistant.

Probably in reaction to the volume of accidents and India’s new emission norms, maximum travel speeds of these articulated boom cranes has been limited to 30-38 km/hr. What’s more, partly due to the weakness of the India Rupee rising costs of diesel have become quite an issue. Already in India’s huge agricultural market, tractor manufacturers are experimenting with alternate ‘clean’ power systems. Amongst these is Escorts which in September announced its first Hybrid tractor.

WHAT CHANCE FRANNA?

After many years dominance of the Australasian pick-and-carry market, Franna is somewhat belatedly entering the Indian crane market. The 17-tonne capacity FR.17 is a development of their earlier UC.15 design. It is to be assembled at Terex’s Indian plant, which was established back in 2008 in the industrial city of Hosur in Tamil Nadu Province near Bengaluru where major companies like Ashok Leyland and Cat are also based. The first production FR.17s are scheduled for imminent production.

This is a bold move by Franna, for while the size of the market is enticing it offers an extremely difficult commercial challenge. There is no doubting the technical appeal of the FR.17 which is designed and rated to Indian Standard IS 4513 with 75% ratings offering a substantial safety margin increase compared to the 85% ratings widely used by the competition. Its powered by a locally-manufactured Volvo Eicher 74kW (101 bhp) diesel which meets the latest CEV Bharat Stage IV emission standards. Like other locally-manufactured cranes of this type, the Franna can be equipped with front outriggers which are particularly useful for dragging operations in rescuing wrecked vehicles. Its four-part 18.23m slotted boom is ‘U’ shaped with maximum heights of 20.4m. As with Franna’s Australian market models, automatically-reduced load charts for lifting in various chassis articulation modes are incorporated in the (optional) LMI.

All wheel drive is standard and chassis articulation of +/- 40-degrees via an Orbitrol steering wheel facilitates a tight 6.6m turning radius. 11.00 x 20 twin tyres are employed front and rear. A torque converter-driven Carraro 4-speed Synchro shuttle transmission allows travel speeds to a healthy 45 km/hr with a very useful creep speed of <2km/hr for safe ‘inching’ pick-and-carry lifting. Travel control is simplified since there is no clutch pedal; speed ranges are changed via electrohydraulic actuation using the FNR lever on the steering console. The 2.55m wide compact crane has a chassis length of just 6.25m and clearance height of only 2.34m. The 16.3-tonne GVW crane features a well-appointed spacious and insulated 2-man full width cab – a step change benefit over domestic competition. An 8-tonne capacity Rhino hook fixed to the boom head is a useful option as are telematics. As might be expected from Australia’s leading mobile crane maker, the FR.17 comes with numerous standard safety features sensing various fluid levels and temperatures and working speeds.

As Indian crane buyers recognize the need for safer cranes, the Franna most certainly should be on their radar.

CHINESE DOMINATION?

Turning to India’s ‘mobile’ tele boom crane manufacturing industry, it has been a very difficult couple of years for the likes of Grove licensee TIL Ltd. In the fiscal year to March 31st 2021, TIL’s revenues dipped for the second consecutive year. At the end of fiscal 2020-21 they stood at INR 312,4m Lakhs – down from 2019- 20’s INR 471.1m with EBITDA of INR 60.94m reversing to a loss of 25.91m in the latest period.

Over the last decade, India’s oldest-established crane maker (it began in 1962) has come under more competitor pressure that at any time in its long and illustrious history. Having made some 6,000 Coles and Grove mobile cranes at its Kamahatty, Kolkata plant the massive inroads made by Zoomlion, Sany and XCMG have radically changed the Indian mobile crane landscape. Nevertheless, TIL has not been sleeping, having developed additional manufacturing facilities in West Bengal and invested in significant new product development. As well as introducing two models of 15-tonne pick-and-carry cranes of their own design and a new 80-tonne RT, TIL has further enhanced its truck cranes designs introducing longer five-section ‘formed’ booms and improved operator cabs on its range of 45-80-tonne models.

However, for the past 10-12-years, India has been a primary target market for the Chinese who have invested massively in developing massive local manufacturing facilities, locally-produced machines and extensive sales and service networks. While XCMG has blown hot-and-cold with its stop-start local manufacturing plans, Sany and Zoomlion have torn ahead. Initially Zoomlion had on-again, off-again sales and distribution tie-ups with Escorts (for tower cranes) and ACE (for truck and all terrain cranes), but in 2014 they entered a 70:30 manufacturing joint-venture with India’s large overhead crane maker Electromech primarily focussed on tower cranes. Meanwhile Zoomlion’s plant in Khed, Pune offers truck cranes to 110-tonnes capacity as well as locally-made crawler rotary foundation rigs.

Certainly Zoomlion’s tower and truck cranes have sold extremely well in the Indian market. In recent years the company has been selling impressive numbers of locally-produced truck cranes of up to 80-tonnes capacity as well as imported all terrains to 200-tonnes capacity and lattice crawlers of 55 to 1,500-tonnes capacity. Their 80-tonne ZTC 800R532 is the best-selling truck crane in its class, building on a 50-unit 2015 order from Reliance for its 75-tonne QY 75V. In recent months Amrik Singh & Sons have purchased three of the 80-tonners while single units have been acquired by Ganesh Movers & Lifters, Ajanta Crane Service, Jeet Crane Service of Rajasthan, Noor Lifters of Mumbai, Agarwal Lifters with two to Makatma. The latest model to join the line is the 110-tonne capacity ZTC 1100H with a six-section 58.5m boom with ten units already pre-sold.

However the big headlines have gone to Amrik’s purchase of a 200-tonne ZAT 2000 All Terrain and to the 450-tonne ZAT 4500H sold to Tara Chand Logistics Solutions. Meanwhile Santosh added a 150-tonne ZCC 1500V crawler and a ZCC 5800V went to GR Infra.

Sany Heavy Industry India Pvt was established as a sales and service business in 2002, initially selling four imported motor graders. After finding strong success with large volumes of imports, in 2007 Sany announced it would invest $70m in a new greenfield plant on a 100-acre site in Talegaon near Pune. In 2009 the plant produced its first products - concrete mixers followed in 2012 with the SY 200C-9 crawler excavator and the SD 500 50-tonne crawler crane. When local crawler crane demand failed to meet expectations in 2013, this product line was discontinued and the following year a 25-tonne tele truck crane and three more excavator models went into production.

In 2015 Sany India began local production of RT cranes of 40, 55 and 75-tonnes capacity but this too proved a mis-step. In 2016 the 5,000th Indian product left the Pune factory and by 2020 the 15,000th with the line now including 16 excavators and 7 tele truck cranes. By then the plant was employing 700 people and annual sales reached $190m. Since 2014 Sany has revamped its Indian distribution system and significantly enhanced its service and parts support. It has 36 dealers in India and South Asia and has established a local finance company to assist export growth to South Asia as well as to Africa. The company has developed what it calls ‘very close relationships’ with key local suppliers like Cummins and Kawasaki and encourages them to supply their latest technology which Sany ‘blind’ tests.

In May 2021, Sany India’s Vice President of its Heavy Equipment, Sanjay Saxena, announced the release of four new and upgraded truck cranes – the STC 250C, STC 450C, STC 600C and STC 800C that meet the Bharat CEV Stage IV norm. In addition to being more fuel-efficient, the 25-tonne STC 250C has a longer 33.5m boom. The new 45-tonne STC 450C has a 43.5m boom and the latest to join the line is the 60-tonne STC 600C with the longest boom in its class of 45.5m now being joined by the STC 899CX with its 47.5m boom.

Overall then, domestic demand for pick-and-carry cranes is expected to continue to climb through 2021 and into 2022 and 2023. It is forecast to stall and potentially dip in the pre- and post-election periods of April- May 2024. However, looking forward, despite the prevailing mood of optimism, there are serious fears that a second Covid wave could restrict labour mobility and machinery utilization, having a devastating impact on India’s construction industry. That is a storm that the revitalised Indian lifting industry will have to face.

Indian icon - the tractor crane
Franna’s new FR.17 pick-andcarry offers safety in lifting
The Terex facility at Hosur in Tamil Nadu